There's a lot being said about the bedroom tax, but what does it mean, and do you have to pay it?
What is the bedroom tax?
The 'bedroom tax' is a nickname that Labour applied to the housing benefit changes made by the current government in April 2013.
The government factsheet on the changes explains that they affect all working-age people living in social housing, and judges whether they have more space than they need.
The news rules allow one bedroom per:
- Adult couple (married or unmarried)
- Adult aged 16 or over
- Two children of the same sex aged under 16
- Two children under 10
- Other child (other than a foster child or child whose main home is elsewhere)
What will does it cost?
If you're assessed as having more rooms than you need, your housing benefits will be reduced by 14% for one spare room, or 25% for two or more.
The government say that council tenants will lose an average of £14 a week, and housing association tenants will lose around £16 per week.
Are there any exceptions?
Following a legal challenge, extra allowances have been made for:
- Children who can't share because of a disability or medical condition
- A carer (or team of carers) providing overnight care
- A foster carer between placements, or a newly approved foster carer
So if you fit these criteria, you can challenge the benefits reduction.
What about legal loopholes?
There is one, although it's in the process of being closed.
An error in the legislation means that tenants who have lived in the same home continuously since 1996, and have claimed benefits for the duration of that period, may be exempt from the bedroom tax and can have any subsequent benefits refunded. Some estimates place the number of people affected at 40,000, while others suggest it is as many as one in 25 housing benefit claimants.
How can you appeal decisions?
To claim based on the above loophole, you can fill in this template letter, created by housing consultant Joe Halewood, and send it to your landlord.
If you were affected by the bedroom tax, you only have one month from receipt of the letter detailing the decision on your case. If you are within this limit, you will need to reply detailing your case against it - using an argument from the lists above. Carers UK have provided useful template letters to help.
You can also appeal a decision, or apply for changes to your benefits via the government's Housing Benefit microsite. If you can show that the changes have put you in an untenable position financially, you may be eligible for reconsideration.
Before applying, it's essential to have a clear view of your finances so that you have a strong argument. Our free Money Dashboard finance software can collate all of your account data in one secure space, so you can see exactly how much you're receiving and where it goes.
Posted by Marc Murphy, Marketing Manager at Money Dashboard.